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PETALING JAYA (May 17): Cagamas Bhd, the National Mortgage Corporation of Malaysia, plans to unveil a reverse mortgage scheme this year to offer financial assistance to the retirees, reported The Star.
Citing Cagamas Bhd president and chief executive officer Datuk Chung Chee Leong, the report said the reverse mortgage scheme enables an elderly homeowner to obtain a loan using the property as a collateral to receive a monthly disbursement which they could use as their daily expenses.
During the period, the elderly could still stay in the property. The repayment of the loan and interest will begin after the elderly passed away or when they decided to sell the house.
If the proceeds from the sale of the house are more than the borrowing amount, the balance will be given back to the owner’s heirs. However, if the proceeds are less than the borrowing amount, the losses will be borne by the guarantor of this scheme- Cagamas.
Chung said Cagamas is now in talks with a party that specialises in counseling to provide independent advice as part of the service.
He stressed that the scheme is designed to help the elderly who are looking for more financial assistance to improve their standard of living, this shouldn’t be seen as a measure to drive the property market.
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